Tencent Ups Stake in Ubisoft Through Strategic Investment

In a significant development, Ubisoft has announced a partnership between Tencent and Guillemot Brothers Limited, resulting in the Chinese technology giant indirectly increasing its stake in the publisher. Tencent is investing €300 million to secure a 49.9% stake in GBL, which previously held almost 13% of Ubisoft's shares. Additionally, Tencent will provide GBL with a long-term unsecured loan, potentially enabling the purchase of a larger stake in Ubisoft. This deal marks Tencent's entry into the Guillemot family concert, a collective entity comprising GBL and individual Guillemot family members, which can collectively own up to 29.9% of Ubisoft shares with voting rights. Following the completion of this transaction, the Guillemot family concert will hold 24.9% of voting shares. Although Tencent will have only 5% voting rights in GBL, without a seat on the board of directors or consent and veto rights in business operations, the company has been granted permission by Ubisoft's board of directors to increase its direct stake in Ubisoft from 4.5% to nearly 10%. Tencent is restricted from selling its shares for five years and cannot increase its stake beyond the 10% threshold for eight years. This investment implies a valuation of €80 per share, representing an 85% premium on Ubisoft's closing share price. Last month, Reuters reported that Tencent was seeking to increase its stake in Ubisoft, with sources indicating a willingness to pay up to €100 per share. According to Ubisoft CEO Yves Guillemot, 'The expansion of the concert with Tencent reinforces Ubisoft's core shareholding around its founders, providing the company with the stability necessary for its long-term development.' Tencent has been involved with Ubisoft since 2018, following its acquisition of part of Vivendi's stake and the announcement of a strategic agreement to bring Ubisoft games to China.